Aid groups: US should send cash, not food, abroad

WASHINGTON (AP) - Food aid groups are urging the Obama administration to overhaul the way the United States helps starving people abroad.

The White House will not say whether Obama's budget proposal, scheduled to come out next week, will seek to change the way foreign food aid is distributed. But food aid groups, farm groups and their allies in Congress are preparing for the possibility.

At issue is whether the government should ship U.S.-grown food overseas to aid developing countries and starving people or simply help those countries with cash to buy food. The United States now donates much of its food aid by shipping food abroad, a process many food aid groups say is inefficient.

Former President Bill Clinton said after the 2010 earthquake in Haiti that U.S. policies to flood developing countries with agricultural imports _ a boon to rice farmers in his native Arkansas _ had been a mistake after many of Haiti's own rice farmers were put out of business.

Three years later, aid groups are pushing Obama to make the kind of change Clinton argued for and send cash in lieu of crops.

Sending crops abroad has long been a profitable enterprise for American farmers and shippers, and those groups are strongly opposing any changes to the program.

But several food aid groups say times have changed and argue that shipping bulk food abroad is too expensive when government budgets are tight and developing countries need every dollar. Particularly controversial is the process of what is called "monetization," or selling the food once it arrives overseas to finance development projects. A 2011 report by the Government Accountability Office found monetization cost the U.S. an extra $219 million over a three years, money that could have been used for other development projects.

Aid groups are split on the point, since some finance their activities through monetization. But major aid groups like Oxfam and CARE say the process can destroy local agriculture by dumping cheap crops on the market at a price too low for local farmers to compete.

The food aid groups are pushing Obama to shift all or part of the average $1.8 billion spent on the program annually to other cash development accounts. But if the administration does propose a change, it could be in for a tough political battle.

Worried that an overhaul of the Food for Peace program could come in Obama's budget, a bipartisan group of 21 senators wrote a letter to the president in February asking him not to make changes.

"American agriculture is one of the few U.S. business sectors to produce a trade surplus, exporting $108 billion in farm goods in 2010," the senators wrote. "During this time of economic distress, we should maintain support for the areas of our economy that are growing."

The letter was signed by Michigan Democratic Sen. Debbie Stabenow, the chairwoman of the Senate Agriculture Committee, and Arkansas Democratic Sen. Mark Pryor, the chairman of the Senate subcommittee that controls agriculture spending. The top Republicans on both of those panels signed the letter as well, as did Senate Appropriations Chairwoman Barbara Mikulski, D-Md.

Farm groups say the program is also a public relations tool for the United States.

"Bags of U.S.-grown food bearing the U.S. flag and stamped as "From the American People" serve as ambassadors of our nation's goodwill, which can help to address the root causes of instability," several farm and shipping groups wrote in a February letter to Obama.

"These are the kinds of things you don't want to make dramatic quick changes to," said Roger Johnson, president of the National Farmers Union, one of the groups that signed the letter.

But aid groups say change is a long time coming. Gawain Kripke of Oxfam said his group estimates that by spending the same amount of money, the United States could provide assistance for 17 million more poor people by changing the way the aid is distributed.

Blake Selzer of CARE said he is encouraged that food aid is being discussed.

"A lot of people don't understand our food aid program," he said. "The more daylight this is given, the more people will say to themselves, is this the best way to use our tax dollars?"

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